Exhibit A: A Nebraska woman posted an offer on eBay to sell a Chicken McNugget she’d saved from three years ago because it looked exactly like George Washington in profile. The deep-fried presidential lookalike fetched a winning bid of $8,100. But the winner backed out. Now, according to media reports, the seller is considering whether to accept the second-highest bid, a mere $8,000, or to put it on the block again.
Exhibit B: McDonald’s says sales at U.S. restaurants open for at least 12 months increased year-over-year by an average of 11.1% in February, and that worldwide comps jumped 7.5%. That prompted stock traders to sell their shares, citing the disappointing results.
The clincher: A food writer for the Grand Forks (N.D.) Herald touched off an online firestorm by reviewing the town’s new Olive Garden. Urbanites (no doubt dressed all in black) posted it on various article-sharing sites so fellow elitists could share the hilarity of a mass-market chain concept being the subject of a serious restaurant review. Some posed the possibility in feedback forums of the review actually being a put-on from The Onion.
But as the reviewer pointed out, with more tact and class than her snobby disparagers deserved, Grand Forks doesn’t abound in restaurants, and locals wonder where they should eat. The 86-year-old writer, Marilyn Hagerty, should get the last laugh. Her well-written and useful column drew 107,000 views in a town of fewer than 55,000 residents. She may not eat at David Chang’s or Grant Achatz’s places every week, but she’s serving her audience.
Showing posts with label Olive Garden. Show all posts
Showing posts with label Olive Garden. Show all posts
Thursday, March 8, 2012
Tuesday, July 5, 2011
The $75,000 question
Never mind the fireworks. The boom that should’ve had restaurant executives covering their ears last week was the bombshell observation by the company that runs Olive Garden.
The comment slipped past almost unnoticed during a routine presentation to Wall Street analysts. That’s ironic, since the aside was a DefCon 4 alert for casual dining to reassess what market it serves.
Most of that sector stands in awe of Olive Garden, a concept whose middle American take on Italian fare generates $4.8 million in sales per restaurant, much of it from high-margin pasta choices. But lately, the bloom has been off the rosè.
Sales have uncharacteristically stagnated for the brand, while sister concepts like Red Lobster, LongHorn and Capital Grille have enjoyed the sort of same-store sales increases (3.8%, 6% and 7.9%, respectively) that make you suspect steroid use.
“It’s worth noting,” observed Darden president and COO Drew Madsen, “that we’re continuing to see a narrowing in the casual-dining user base.”
He explained that the percentage of customers from households with an annual income of at least $75,000 “has significantly increased their share of traffic, both during the recession and after.” Not coincidentally, patrons from homes with paychecks of $60,000 now account for an appreciably smaller part of Darden’s clientele.
Madsen didn’t specify if the rising share of traffic was the result of an increase in visits by the higher-income group, or of a drop-off by the lower-income crowd. Even when pressed by financial analysts participating in the call, he and other Darden officials would only talk in terms of “share of traffic,” not absolute changes in visits by either group.
They were more forthcoming about the implications of the shift. To appeal to both the higher-income customer and the one with less than $60,000 in annual income, Olive Garden will strive to deliver what the execs termed “price certainty,” or a clearer idea of what a customer will pay.
“Customers aren't looking for a discount,” explained Clarence Otis, Darden’s CEO. “But they want to kind of know a little bit more, with a little bit more precision, what they're going to spend when they choose to go out.”
The execs noted that a similar strategy has worked well for Red Lobster. They cited the example of the seafood chain’s current promotional deal, a four-course meal for $15 per person.
Madsen noted that Olive Garden will take a more tactical approach with its advertising in the near future, delivering more of a “short-term call to action” than “longer-term equity building.” Deals will also give a set price, rather than the “starting at” level of past promotions.
The comment slipped past almost unnoticed during a routine presentation to Wall Street analysts. That’s ironic, since the aside was a DefCon 4 alert for casual dining to reassess what market it serves.
Most of that sector stands in awe of Olive Garden, a concept whose middle American take on Italian fare generates $4.8 million in sales per restaurant, much of it from high-margin pasta choices. But lately, the bloom has been off the rosè.
Sales have uncharacteristically stagnated for the brand, while sister concepts like Red Lobster, LongHorn and Capital Grille have enjoyed the sort of same-store sales increases (3.8%, 6% and 7.9%, respectively) that make you suspect steroid use.
“It’s worth noting,” observed Darden president and COO Drew Madsen, “that we’re continuing to see a narrowing in the casual-dining user base.”
He explained that the percentage of customers from households with an annual income of at least $75,000 “has significantly increased their share of traffic, both during the recession and after.” Not coincidentally, patrons from homes with paychecks of $60,000 now account for an appreciably smaller part of Darden’s clientele.
Madsen didn’t specify if the rising share of traffic was the result of an increase in visits by the higher-income group, or of a drop-off by the lower-income crowd. Even when pressed by financial analysts participating in the call, he and other Darden officials would only talk in terms of “share of traffic,” not absolute changes in visits by either group.
They were more forthcoming about the implications of the shift. To appeal to both the higher-income customer and the one with less than $60,000 in annual income, Olive Garden will strive to deliver what the execs termed “price certainty,” or a clearer idea of what a customer will pay.
“Customers aren't looking for a discount,” explained Clarence Otis, Darden’s CEO. “But they want to kind of know a little bit more, with a little bit more precision, what they're going to spend when they choose to go out.”
The execs noted that a similar strategy has worked well for Red Lobster. They cited the example of the seafood chain’s current promotional deal, a four-course meal for $15 per person.
Madsen noted that Olive Garden will take a more tactical approach with its advertising in the near future, delivering more of a “short-term call to action” than “longer-term equity building.” Deals will also give a set price, rather than the “starting at” level of past promotions.
Friday, June 25, 2010
It's the service, stupid
Industry savants often tout better service as casual dining’s best defense against challengers like fast-casual chains and retail food outlets. Certainly it’s now the front-and-center strategy of dress-down dining’s biggest and perhaps savviest combatant, the parent of the Red Lobster and Olive Garden chains.
Darden Restaurants explained to investors yesterday that service enhancements will figure prominently in near-term efforts to boost the sales performances of Red Lobster, Olive Garden and the company’s starched-linen concept, Capital Grille. But the initiatives vary greatly in their focus and what aspect of the customer experience they aim to improve.
Olive Garden, for instance, will try to do a better job of estimating and minimizing the wait times for a table. You can infer that part of the mission is sparing guests the teeth-gnashing experience of waiting an hour for a table that was supposedly 20 minutes away from being reset. But the overriding goal is serving more customers during peak periods.
Red Lobster’s program, called VIP Service, is more focused on the customer, judging from the description served up by Darden president Drew Masden. The objective there is discerning why a party is dining with the chain on any particular night and adjusting service accordingly.
That customized approach is similar to the strategy Brinker International set for its Chili’s chain in a recent service overhaul. As Brinker executives explained beforehand, sometimes a couple is rushing to make a movie and appreciate speed of service more than anything. Other times they’re kicking back and looking to enjoy a few drinks and a leisurely meal, with no sense of urgency about rescuing the baby sitter. The art is catering to the guest’s state of mind.
The emphasis on attitude-reading might be termed the Danny Meyer Method, after the famed New York restaurateur. His servers say they’re coached on deciphering the body language of customers to discern who’s in a rush, who’s hunkering down, who’s ready for the check, and who needs another drink.
Different still is the program being undertaken by Capital Grille, Darden’s Eden for meat eaters in suits. The objective there, explained chain chief Gene Lee, is alleviating unpleasant surprises for the chain’s top 10,000 customers. Step One, he indicated, is identifying who those patrons are. Phase II is making sure they have a consistent experience as they dine in Capital Grilles throughout the world.
That initiative might be a tip of the hat to Morton’s, a direct competitor that’s renowned for its consistency, to the point of being dubbed by some as the McDonald’s of steak.
Lee also cryptically cited an effort to communicate with those VIP customers in the ways they prefer. Without saying as much, he strongly suggested that their reservations would be confirmed through methods like e-mail or texting, rather than a phone call.
The execs comments came in yesterday’s conference call with analysts, as reported in a transcript provided by SeekingAlpha.com.
Darden Restaurants explained to investors yesterday that service enhancements will figure prominently in near-term efforts to boost the sales performances of Red Lobster, Olive Garden and the company’s starched-linen concept, Capital Grille. But the initiatives vary greatly in their focus and what aspect of the customer experience they aim to improve.
Olive Garden, for instance, will try to do a better job of estimating and minimizing the wait times for a table. You can infer that part of the mission is sparing guests the teeth-gnashing experience of waiting an hour for a table that was supposedly 20 minutes away from being reset. But the overriding goal is serving more customers during peak periods.
Red Lobster’s program, called VIP Service, is more focused on the customer, judging from the description served up by Darden president Drew Masden. The objective there is discerning why a party is dining with the chain on any particular night and adjusting service accordingly.
That customized approach is similar to the strategy Brinker International set for its Chili’s chain in a recent service overhaul. As Brinker executives explained beforehand, sometimes a couple is rushing to make a movie and appreciate speed of service more than anything. Other times they’re kicking back and looking to enjoy a few drinks and a leisurely meal, with no sense of urgency about rescuing the baby sitter. The art is catering to the guest’s state of mind.
The emphasis on attitude-reading might be termed the Danny Meyer Method, after the famed New York restaurateur. His servers say they’re coached on deciphering the body language of customers to discern who’s in a rush, who’s hunkering down, who’s ready for the check, and who needs another drink.
Different still is the program being undertaken by Capital Grille, Darden’s Eden for meat eaters in suits. The objective there, explained chain chief Gene Lee, is alleviating unpleasant surprises for the chain’s top 10,000 customers. Step One, he indicated, is identifying who those patrons are. Phase II is making sure they have a consistent experience as they dine in Capital Grilles throughout the world.
That initiative might be a tip of the hat to Morton’s, a direct competitor that’s renowned for its consistency, to the point of being dubbed by some as the McDonald’s of steak.
Lee also cryptically cited an effort to communicate with those VIP customers in the ways they prefer. Without saying as much, he strongly suggested that their reservations would be confirmed through methods like e-mail or texting, rather than a phone call.
The execs comments came in yesterday’s conference call with analysts, as reported in a transcript provided by SeekingAlpha.com.
Sunday, September 27, 2009
A new concept headed for Darden's menu?
Is Darden considering an addition to its restaurant empire?
The parent of Red Lobster is moving this Wednesday into new headquarters elsewhere in Orlando, its home turf for the last 40 years, according to an Orlando Sentinel story. Included in the facility, says the article, are six test kitchens and the space to house a seventh. Each will serve a different concept, the piece notes.
In addition to Red Lobster, Darden’s holdings include Olive Garden, Capital Grille, LongHorn Steakhouse, Bahama Breeze and Seasons 52. Their R&D facilities will be firing up their grills in a few days. But why reserve space for a seventh? Is Darden shopping for an acquisition, or perhaps starting the in-house development of something new?
Setting aside space for expansion is hardly proof an addition is a “go.” It’s more like a young family buying a house with a spare bedroom, just in case.
But the article also notes that Darden has to add 400 positions at the new building by 2014 to earn the full tax benefits of the relocation. That’s on a base of 1,260 jobs currently housed there.
That would be a tremendous amount of organic growth, even if Seasons 52, the company’s youngest concept, really zooms cross-country.
And there’s no shortage of acquisition candidates in this buyer’s market. The last expansion of Darden’s portfolio was the purchase of Rare Hospitality, the parent of Capital Grille and LongHorn.
Speculating on possible additions is tough with Darden. Although the company is very conservative, its new concepts have been downright bold. Few would have bet it’d try a healthful concept featuring fresh, seasonal produce, as it did—undoubtedly with great success—with Seasons 52. Ditto with Bahama Breeze, still one of the industry’s few chained Caribbean concepts.
But who can resist making their wild-haired predictions. If Darden were looking to add concepts, I wonder if a burger concept, an everyday grill sort of place, would be one of types on the list. Ditto for an upscale Mexican place, with bold flavors and simple, even healthful preparations.
So, if you live in Orlando, please give a shout if catch the aroma of chipotles wafting out of the new headquarters.
The parent of Red Lobster is moving this Wednesday into new headquarters elsewhere in Orlando, its home turf for the last 40 years, according to an Orlando Sentinel story. Included in the facility, says the article, are six test kitchens and the space to house a seventh. Each will serve a different concept, the piece notes.
In addition to Red Lobster, Darden’s holdings include Olive Garden, Capital Grille, LongHorn Steakhouse, Bahama Breeze and Seasons 52. Their R&D facilities will be firing up their grills in a few days. But why reserve space for a seventh? Is Darden shopping for an acquisition, or perhaps starting the in-house development of something new?
Setting aside space for expansion is hardly proof an addition is a “go.” It’s more like a young family buying a house with a spare bedroom, just in case.
But the article also notes that Darden has to add 400 positions at the new building by 2014 to earn the full tax benefits of the relocation. That’s on a base of 1,260 jobs currently housed there.
That would be a tremendous amount of organic growth, even if Seasons 52, the company’s youngest concept, really zooms cross-country.
And there’s no shortage of acquisition candidates in this buyer’s market. The last expansion of Darden’s portfolio was the purchase of Rare Hospitality, the parent of Capital Grille and LongHorn.
Speculating on possible additions is tough with Darden. Although the company is very conservative, its new concepts have been downright bold. Few would have bet it’d try a healthful concept featuring fresh, seasonal produce, as it did—undoubtedly with great success—with Seasons 52. Ditto with Bahama Breeze, still one of the industry’s few chained Caribbean concepts.
But who can resist making their wild-haired predictions. If Darden were looking to add concepts, I wonder if a burger concept, an everyday grill sort of place, would be one of types on the list. Ditto for an upscale Mexican place, with bold flavors and simple, even healthful preparations.
So, if you live in Orlando, please give a shout if catch the aroma of chipotles wafting out of the new headquarters.
Tuesday, December 23, 2008
More (sea) changes at the top
This morning brought the news that Greg Burns, a leader of the O’Charley’s dinnerhouse chain for 25 years, will step down early next year as CEO and chairman. It’s the latest indication that a changing of the guard is quietly taking place in the restaurant industry as executives who spent a lifetime in the business surrender the helm to newer and presumably more mainstream talent.
O’Charley’s said it hasn’t yet chosen Burns’ successor. But look at some of the replacements that have been named for exiting long-timers. Nigel Travis is stepping into the CEO’s job at Dunkin’ Donuts’ parent company with deep experience in internet sales, international business and retail marketing. The internet wasn’t even known when the standout he’s succeeding, Jon Luther, was starting his career.
Wendy’s had a long tradition of putting operational specialists in the corner office, starting with Dave Thomas, continuing through the legendary Jim Near and the highly respected Gordon Teeter, and then ending with Jack Schussler. Leading the company since its acquisition by Arby’s owner is Roland Smith, a veteran of the golf, bowling, soft drink and pharmaceutical industries. He’s a West Point grad.
Not all of the long-timers exiting top posts are being followed by newcomers with such extensive resumes. Dick Frank, for example, is surrendering his leadership of Chuck E. Cheese to Mike Magusiak, a protégée and longtime exec of the pizza-and-games chain. But Magusiak has a background in finance, having served as CFO. Frank was hailed for his operational and marketing know-how.
And not all the replacements have been named yet. Big Boy, for instance, said it’s still searching for a replacement for Tony Michaels, its longtime leader and an even longer-time veteran of the restaurant industry, including stints with Marriott.
The list of other industry greybeards to step down in recent months include Russ Owens, the casual-dining vet who had been leading P.F. Chang’s Pei Wei Asian Diner fast-casual operation; and Paul Motenko and Jerry Hennessey, the co-founders of BJ’s, who have left the board of that seemingly recession-resistant frontrunner to rev up for a new venture.
I’d be remiss if I didn’t note the counter-current of long-timers getting back into the business. Yesterday, for instance, the new owners of Romano’s Macaroni Grill released the stunning news that the chain would now be led by Olive Garden vet Brad Blum, a brilliant move on the buyer’s part. And Ned Lidvall, perhaps best known for his leadership of Rock Bottom Breweries, will now be leading Friendly’s.
O’Charley’s said it hasn’t yet chosen Burns’ successor. But look at some of the replacements that have been named for exiting long-timers. Nigel Travis is stepping into the CEO’s job at Dunkin’ Donuts’ parent company with deep experience in internet sales, international business and retail marketing. The internet wasn’t even known when the standout he’s succeeding, Jon Luther, was starting his career.
Wendy’s had a long tradition of putting operational specialists in the corner office, starting with Dave Thomas, continuing through the legendary Jim Near and the highly respected Gordon Teeter, and then ending with Jack Schussler. Leading the company since its acquisition by Arby’s owner is Roland Smith, a veteran of the golf, bowling, soft drink and pharmaceutical industries. He’s a West Point grad.
Not all of the long-timers exiting top posts are being followed by newcomers with such extensive resumes. Dick Frank, for example, is surrendering his leadership of Chuck E. Cheese to Mike Magusiak, a protégée and longtime exec of the pizza-and-games chain. But Magusiak has a background in finance, having served as CFO. Frank was hailed for his operational and marketing know-how.
And not all the replacements have been named yet. Big Boy, for instance, said it’s still searching for a replacement for Tony Michaels, its longtime leader and an even longer-time veteran of the restaurant industry, including stints with Marriott.
The list of other industry greybeards to step down in recent months include Russ Owens, the casual-dining vet who had been leading P.F. Chang’s Pei Wei Asian Diner fast-casual operation; and Paul Motenko and Jerry Hennessey, the co-founders of BJ’s, who have left the board of that seemingly recession-resistant frontrunner to rev up for a new venture.
I’d be remiss if I didn’t note the counter-current of long-timers getting back into the business. Yesterday, for instance, the new owners of Romano’s Macaroni Grill released the stunning news that the chain would now be led by Olive Garden vet Brad Blum, a brilliant move on the buyer’s part. And Ned Lidvall, perhaps best known for his leadership of Rock Bottom Breweries, will now be leading Friendly’s.
Sunday, December 21, 2008
Take that, Outback
The LongHorn steakhouse chain is responding to Outback’s head-turner of a $9.99 sirloin dinner with a new steak bargain of its own. Executives of parent company Darden Restaurants said Friday that the chain is about to start pushing “a new signature steak dish” priced at under $10.
The officials didn’t reveal what type or sized steak would be offered at $9.99, but said the promotional item would be rolled out in January and backed by a new commercial. Outback's $9.99 deal consists of a complete meal centered around a 6-ounce steak.
Meanwhile, Darden's main suits told investors, LongHorn is testing a new ad campaign in 30 markets, with an introduction target of March.
LongHorn, which the company acquired in its 2007 purchase of Rare Hospitality, is the weakest of Darden’s three major brands. Olive Garden and Red Lobster are still posting positive comparable-store sales, a monumental feat in the current environment. The gains may be slight (each is under 1%), but reason to have one more glass of Chablis during LobsterFest when compared to the results for LongHorn’s last quarter. The chain’s comps fell 5.7%, while net sales increased only 2.4%, even with the opening of 19 additional outlets.
The biggest of Darden's so-called specialty brands are also feeling the recession, with significant comp declines posted for Capital Grille and Bahama Breeze. It did not break out results for Seasons 52.
The officials didn’t reveal what type or sized steak would be offered at $9.99, but said the promotional item would be rolled out in January and backed by a new commercial. Outback's $9.99 deal consists of a complete meal centered around a 6-ounce steak.
Meanwhile, Darden's main suits told investors, LongHorn is testing a new ad campaign in 30 markets, with an introduction target of March.
LongHorn, which the company acquired in its 2007 purchase of Rare Hospitality, is the weakest of Darden’s three major brands. Olive Garden and Red Lobster are still posting positive comparable-store sales, a monumental feat in the current environment. The gains may be slight (each is under 1%), but reason to have one more glass of Chablis during LobsterFest when compared to the results for LongHorn’s last quarter. The chain’s comps fell 5.7%, while net sales increased only 2.4%, even with the opening of 19 additional outlets.
The biggest of Darden's so-called specialty brands are also feeling the recession, with significant comp declines posted for Capital Grille and Bahama Breeze. It did not break out results for Seasons 52.
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